Quality Management

Quality Management
• Quality
• The ability of a product or service to consistently meet
or exceed customer expectations
• For a decade or so, quality was an important focal point in business. After a
while, this emphasis began to fade as other concerns took precedence
• There has been a recent resurgence in attention to quality given recent
experiences with the costs and adverse attention associated with highly
visible quality failures:
• Auto recalls
• Toys
• Pharmaceuticals
 Definitions of Quality
W.
Joseph Philip
Edwards
Juran Crosby
Deming
(1974) (1979)
(1950) In your eyes i.e. Conformance to
Fitness for use
customer requirements

Focus on
Costs of quality Quality is Free
process quality

Juran’s trilogy-
planning,
PDCA Cycle Zero Defects
control &
improvement
Lowe et al. (1986) - Three preachers, One religion
 Quality Contributors
• Walter Shewart
• “father of statistical quality control”
• Control charts
• Variance reduction

• Genichi Taguchi
• Taguchi loss function

• Taiichi Ohno and Shigeo Shingo

• Developed philosophy and methods of kaizen
 Quality Contributors (contd.)
• Armand Feigenbaum
• Quality is not just a collection of tools and methods but a “total field”
• The customer defines quality
• Philip B. Crosby
• Zero defects
• Quality is Free, 1979
• Kaoru Ishikawa
• Cause-and-effect diagram
• Quality circles
• Recognized the internal customer
 Dimensions of Product Quality
• Performance – main characteristics of • Durability – the useful life of the
the product product
• Aesthetics – appearance, feel, smell, • Perceived quality – indirect
taste evaluation of quality
• Special features – extra characteristics • Serviceability – handling of
• Conformance – how well the product complaints or repairs
conforms to design specifications • Consistency – quality doesn’t vary
• Reliability – consistency of performance
 Dimensions of Service Quality
Reliability – ability to Responsiveness –
Convenience – the
perform a service willingness to help
availability and
dependably, customers in unusual
accessibility of the
consistently, and situations and to deal
service
accurately with problems

Assurance – knowledge
Time – the speed with exhibited by personnel Courtesy – the way
which the service is and their ability to customers are treated
delivered convey trust and by employees
confidence

Tangibles – the physical

Consistency – the ability
appearance of facilities, Expectancy – meet (or
to provide the same
equipment, personnel, exceed) customer
level of good quality
and communication expectations
repeatedly
materials
 Responsibility for Quality
• Everyone in the organization has some
• Top management responsibility for quality, but certain areas
• Design of the organization are involved in
• Procurement activities that make them key areas of
responsibility.
• Production/operations
• Quality assurance
• Packaging and shipping
• Marketing and sales
• Customer service
 Benefits of Good Quality
• Enhanced reputation for quality
• Ability to command premium prices
• Increased market share
• Greater customer loyalty
• Lower liability costs
• Fewer production or service problems
• Lower production costs
• Higher profits
 The Consequences of Poor Quality
• Loss of business
• Liability
• Productivity
• Costs
 Costs of Quality

• Internal failure costs

Costs from product defect before shipment to the customer
• Scrap, Reworks, Downtime etc

• External failure costs

Cost associated with defects found after shipment to customer.
– Complaints adjustment, Warranty charges
 Costs of Quality
• Appraisal costs
Cost associated with discovering the condition of products and
raw materials
– Incoming material inspection, Evaluation of stocks
• Prevention costs
Cost associated with preventing defects and limiting failure and
appraisal cost
• Quality planning , Process control, Quality reporting, Improvement
projects
Costs of Quality (Juran, Quality planning)
External failure Appraisal costs Prevention costs
Internal failure costs costs
Scrap Complaints Incoming material Quality planning
Reworks adjustment inspection New product review
Retest Returned materials Inspection and test Training
Downtime Warranty charges Maintaining Process control
Yield losses accuracy of test
Allowances Quality data
Disposition equipment
acquisition and
Materials and analysis
services consumed
Quality reporting
Evaluation of stocks
Improvement
projects
Costs of Quality (Juran, Quality planning)
 Continuous Improvement
• Continuous Improvement
• Philosophy that seeks to make never-ending improvements to the process of
converting inputs into outputs
• Kaizen
• Japanese word for continuous improvement.
 PDSA Cycle
• Plan-Do-Study-Act (PDSA) Cycle Act Plan

• Plan
Study Do
• Begin by studying and documenting the current process.
• Collect data on the process or problem
• Analyze the data and develop a plan for improvement
• Specify measures for evaluating the plan
• Do
• Implement the plan, document any changes made, collect data for
analysis
 PDSA Cycle
• Plan-Do-Study-Act (PDSA) Cycle Act Plan

• Study
• Evaluate the data collection during the do phase Study Do

• Check results against goals formulated during the plan phase

• Act
• If the results are successful, standardize the new method and communicate it to the
relevant personnel
• Implement training for the new method
• If unsuccessful, revise the plan and repeat the process
 Process Improvement
• A systematic approach to improving a process
• Map the process
• Collect information about the process and identify each step in the
process
• Prepare a flowchart that accurately depicts the process
• Analyze the process
• Ask critical questions about the process
• Ask specific questions about each step in the process
• Redesign the process
Basic Quality Tools
 Seven Tools of TQM
(a) Check Sheet: An organized method of recording data
(b) Scatter Diagram: A graph of the value of one variable vs. another
variable

Productivity

Absenteeism
(c) Cause-and-Effect Diagram: A tool that identifies process
elements (causes) that might effect an outcome

Cause
Materials Methods
Effect

Manpower Machinery
(d) Pareto Chart: A graph to identify and plot problems or defects in
descending order of frequency

Frequency

Percent
A B C D E
(e) Flowchart (Process Diagram): A chart that describes the steps in a
process
(f) Histogram: A distribution showing the frequency of occurrences of a
variable
Distribution

Frequency

Repair time (minutes)

(g) Statistical Process Control Chart: A chart with time on the horizontal axis
to plot values of a statistic

Upper control limit

Target value

Lower control limit

Time
Statistical Process Control
 Variations

Variation is natural phenomenon

No two products or service

experiences are exactly the same.
 Two types of Variations

Variation due to Variation due to

chance causes assignable causes
Total variation = Chance Causes + Assignable Causes

To reduce Total Variation

• First reduce or eliminate assignable cause variation
• Reduce Chance cause variation
 Quality Characteristics

Variables Attributes
◼ Measured values; e.g., weight, ◼ Has or Has not/Good or Bad/Pass
length, volume, voltage, current or Fail/Accept or Reject
etc. ◼ Characteristics for which you focus
◼ May be in whole or in fractional on defects
numbers ◼ Categorical or discrete random
◼ Continuous random variables variables
 Statistical Process Control

❖ Statistical technique used to ensure process is making product to standard

❖ All process are subject to variability

• Natural causes: Random variations and Assignable causes: Correctable problems like
Machine wear, unskilled workers, poor material

❖ Objective: Identify assignable causes

❖ Uses process control charts

 Sampling Distributions

1. The sample mean is the sum of the observations divided

by the total number of observations
n

x i
where x = i =1
n
xi = observation of a quality characteristic (such as time)
n = total number of observations
x = mean
 Sampling Distributions

2. The range is the difference between the largest

observation in a sample and the smallest. The standard
deviation is the square root of the variance of a
distribution. An estimate of the process standard
deviation based on a sample is given by
( x ) 2

where  =  (x − x)
2
x
2
i −
n
i
i
or  =
n −1 n −1
σ = standard deviation of a sample
 Sample and Process Distributions
Mean
Distribution of
sample means

Process
distribution

25 Time
Relationship Between the Distribution of Sample Means and the Process Distribution
 Assignable Causes
Average

Time
(a) Location
Effects of Assignable Causes on the Process Distribution for the Lab Analysis Process
 Assignable Causes
Average

(b) Spread Time

Effects of Assignable Causes on the Process Distribution for the Lab Analysis Process
 Assignable Causes
Average

(c) Shape Time

Effects of Assignable Causes on the Process Distribution for the Lab Analysis Process
Percentage of values within given ranges for
Normal Distribution
 Control Limits

• Control Limits are the statistical boundaries of a process which

define the amount of variation that can be considered as normal or
inherent variation
▪ 3 sigma control limits are most common
▪ + 3σ from the mean
▪ If the process is in control, a value outside the control limit will occur
only 3 times in 1000 ( 1 - 0.997 = .003)
 Process Control Limit
Assignable causes
Upper Control Limit
Chance
Cause

Mean
X

Lower Control Limit

Assignable causes
Precision vs Accuracy
 Process Control Limits

• Control Limits define the limits of stability

• The UCL and LCL are calculated so that, if the process is stable, almost
all of the process output will be located within the control limits.
• 3 sigma control limits
• The most commonly used
• UCL is 3 standard deviations above the average
• LCL is 3 standard deviations below the average
 Process Control Limit Cont…

• Measures inside control limits are assumed to come from a stable

process
• Measures outside the control limits are unexpected and considered
the result of an assignable cause
• The control limits are computed directly from the sample data selected
from the process
• The limits and the average are not the choice of management or
the operator - Formulae exist.
• The control limits define the range of inherent variation for the process
as it currently exists, not how we would like it to be.
 Control Chart Purpose

• Show changes in data pattern

o e.g., trends
✓ Make corrections before process is out of control

• Show causes of changes in data

o Assignable causes
✓ Data outside control limits or trend in data
o Natural causes
✓ Random variations around average
 Control Chart Types

. Continuous Control Categorical or Discrete

Numerical Data Charts Numerical Data

Variables Attributes
Charts Charts

R X P C
Chart Chart Chart Chart
Process is out of control ..When ?
 Control Charts - Errors

• These errors can be controlled by the choice of control limits

 SPC Methods
• Control charts for variables
• R-Chart
where UCLR = D4R and LCLR = D3R
R = average of several past R values and the central line of the
control chart
D3, D4 = constants that provide three standard deviation (three-sigma)
limits for the given sample size
oShows sample ranges over time
oDifference between smallest & largest values in inspection sample
oMonitors variability/consistency of process
 SPC Methods
⚫ Control charts for variables
x-Chart

where UCLx = x + A2R and LCLx = x – A2R

x = central line of the chart, which can be either the average of past sample
means or a target value set for the process
A2 = constant to provide three-sigma limits for the sample mean

• Shows sample means over time

• Monitors process average
• Example: Weigh samples of coffee & compute means of samples
 Control Chart Factors
FACTORS FOR CALCULATING THREE-SIGMA LIMITS FOR
THE x-CHART AND R-CHART
Size of Sample Factor for UCL and LCL for Factor for LCL for Factor for UCL for R-Chart
(n) x-Chart (A2) R-Chart (D3) (D4)
2 1.880 0 3.267
3 1.023 0 2.575
4 0.729 0 2.282
5 0.577 0 2.115
6 0.483 0 2.004
7 0.419 0.076 1.924
8 0.373 0.136 1.864
9 0.337 0.184 1.816
10 0.308 0.223 1.777
 Steps for x- and R-Charts

1. . Collect data

2. Compute the range

3. Use Table to determine R-chart control limits

4. Plot the sample ranges. If all are in control, proceed to step 5. Otherwise,
find the assignable causes, correct them, and return to step 1.
5. Calculate x for each sample
 Steps for x- and R-Charts

6.. Use Table to determine x-chart control limits

7. Plot the sample means. If all are in control, the process is in statistical
control.

8. Continue to take samples and monitor the process. If any are out of
control, find the assignable causes, correct them, and return to step 1. If
no assignable causes are found, assume out-of-control points represent
common causes of variation and continue to monitor the process.
 An Alternate Form

.If the standard deviation of the process distribution is known,

another form of the x-chart may be used:
UCLx = x + zσx and LCLx = x – zσx
where

σx = σ/ n
σ = standard deviation of the process distribution
n = sample size
x = central line of the chart
z = normal deviate number
Example- Mean chart
How Mean and Range charts complement each other
How mean and Range charts complement each other
 Selection of Rational Samples for X & R Chart
• Sample
• From homogeneous lots: Drawn from same population
• Minimize the difference within samples
• Maximize the differences between samples: Maximize the opportunity for variation
from one sample to another.
• Sample should be taken at equal intervals
• Sample Size
• Between 4 to 10, 4 to 5 sample size is common in industry
• Larger the samples size, the better the chance of detecting small shift: More sensitive to
small variation in the process average.
• Frequency of Sampling
• Trade off between the cost of obtaining information compared to the cost of not
detecting a nonconformance items
 Process Capability

• Process capability refers to the ability of the process to meet the

design specification for the product or service

• Design specifications are often expressed as a nominal value or a

target and a tolerance or an allowance limit
Process Capability
Nominal
value

Process distribution
Lower Upper
specification specification

Minutes
20 25 30

(a) Process is capable

Process Capability
Nominal
value

Process distribution

Lower Upper
specification specification

Minutes
20 25 30

(b) Process is not capable

Process Capability
Nominal value

Six sigma

Four sigma

Two sigma

Lower Upper
specification specification

Mean
 Process Capability
• The process capability index measures how well a
process is centered and whether the variability (if
any) is acceptable

x – Lower specification Upper specification – x

‘
Cpk = Minimum of
3σ
where 3σ
σ = standard deviation of the process distribution
 Process Capability
• The process capability ratio tests whether process
variability is the cause of problems.
• If a process is capable, the difference, also called
the tolerance width, must be greater than 6
standard deviations.

Upper specification – Lower specification

Cp =
6σ
Six Sigma
Process average OK; Process variability OK;
too much variation process off target
X X
X X X
X
X XX
X X X
X
X
X X

X X
Process
on target with
Reduce low variability Center
spread process

XX
XX
X
X XX
 Determining Process Capability
Step 1. Collect data on the process output, and
calculate the mean and the standard deviation
of the process output distribution.

Step 2. Use the data from the process distribution

to compute process control charts, such as
an x and an R-chart.
 Determining Process Capability
Step 3. Take a series of at least 20 consecutive random samples
from the process and plot the results on the control
charts. If the sample statistics are within the control
limits of the charts, the process is in statistical control. If
the process is not in statistical control, look for assignable
causes and eliminate them. Recalculate the mean and
standard deviation of the process distribution and the
control limits for the charts. Continue until the process is
in statistical control.
 Determining Process Capability
Step 4. Calculate the process capability index. If the results are
acceptable, the process is capable and document and
implement any changes made to the process; continue
to monitor the output by using the control charts.

If the results are unacceptable, calculate the process

capability ratio. If the results are acceptable, the process
variability is fine and management should focus on
centering the process. If not, management should focus
on reducing the variability in the process until it passes
the test. As changes are made, recalculate the mean and
standard deviation of the process distribution and the
control limits for the charts and return to step 3.
 Assessing Process Capability

⚫ The intensive care unit lab process has an average turnaround

time of 26.2 minutes and a standard deviation of 1.35 minutes
⚫ The nominal value for this service is 25 minutes with an upper
specification limit of 30 minutes and a lower specification limit of
20 minutes
⚫ Is the lab process capable of this level of performance?
 Assessing Process Capability
SOLUTION
The administrator began by taking a quick check to see if the process is
capable by applying the process capability index:

26.2 – 20.0
Lower specification calculation = = 1.53
3(1.35)

Upper specification calculation = 30.0 – 26.2 = 0.94

3(1.35)
Cpk = Minimum of [1.53, 0.94] = 0.94
Since the target value for four-sigma performance is 1.33, the process
capability index told her that the process was not capable. However,
she did not know whether the problem was the variability of the
process, the centering of the process, or both. The options available to
improve the process depended on what is wrong.
 Assessing Process Capability
She next checked the process variability with the process
capability ratio:
30.0 – 20.0
Cp = = 1.23
6(1.35)

The process variability did not meet the four-sigma target of 1.33.
Consequently, she initiated a study to see where variability was
introduced into the process.
Two activities, report preparation and specimen slide preparation,
were identified as having inconsistent procedures. These
procedures were modified to provide consistent performance. New
data were collected and the average turnaround was now 26.1
minutes with a standard deviation of 1.20 minutes.
 Assessing Process Capability
She now had the process variability at the four-sigma level of
performance, as indicated by the process capability ratio:

30.0 – 20.0
Cp = = 1.39
6(1.20)

However, the process capability index indicated additional

problems to resolve:

(26.1 – 20.0) (30.0 – 26.1)

Cpk = Minimum of , = 1.08
3(1.20) 3(1.20)
Six Sigma
Process average OK; Process variability OK;
too much variation process off target
X X
X X X
X
X XX
X X X
X
X
X X

X X
Process
on target with
Reduce low variability Center
spread process

XX
XX
X
X XX